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Valeant Is Raising Discounts on Expensive Drugs

The headquarters of Valeant Pharmaceuticals International, Inc. stands in  Bridgewater Township, U.S., on Wednesday Nov. 04, 2015. Photographer: Michael Nagle/BloombergThe headquarters of Valeant Pharmaceuticals International, Inc. stands in  Bridgewater Township, U.S., on Wednesday Nov. 04, 2015. Photographer: Michael Nagle/Bloomberg
Investors are seeking greater clarity on Valeant's direction.Photograph by Michael Nagle — Bloomberg Finance

Valeant Pharmaceuticals (VRX) said on Monday it would raise the discounts to hospitals on its heart drugs Nitropress and Isuprel to as much as 40% off list prices after shareholder William Ackman pledged to revisit controversial price increases on the treatments.

Valeant has been criticized by doctors and is being investigated by the U.S. Senate after having raised the price of Isuprel by about 720% and Nitropress by 310% after it bought the drugs from Marathon Pharmaceuticals in 2015.

The Canadian drugmaker, which acknowledged aggressive pricing practices during a U.S. congressional probe late last month, earlier this month formed a committee to oversee drug pricing policies.

Valeant had previously pledged to give hospitals volume-based discounts of up to 30% off the price, but U.S. Senators said during last month’s hearing that it believed hospitals were not receiving the after-market discounts.

The company said on Monday all hospitals were eligible for a rebate of at least 10%, with rebates totaling 20%, 30 percent or 40% based on the volume purchased during a quarter, Valeant said.

Valeant did not cut the list prices of the drugs.

 

Last month, activist investor Bill Ackman, whose investment in Valeant has lost more than $1 billion in value, testified to the Senate that the company was going to look at price cuts after it formed a committee.

The Senate also investigated the price increases on two other Valeant drugs, Syprine and Cuprimine, which are used to treat a rare genetic disorder called Wilson’s Disease.